Without a doubt, the catering equipment market is booming. With an expected turnover of £1.1 billion this year, the upsurge in new equipment has fuelled growth in both suppliers and manufacturers alike, and the marketplace shows no sign of slowing. However despite this growth, businesses are facing ever-increasing challenges to meet the financial demands of buying new equipment, with many failing to afford to do so. Despite the advantages that new equipment can bring – such as higher quality food, lower waiting times, increased capacity, and ultimately a higher return – it’s often difficult to afford such a huge outlay when the average kitchen can range from £1,000 up to £250,000.
Educating businesses and SMEs in alternative ways of financing can be difficult. For many people, the mindset of getting finance is either a negative one – inevitably it will lead them into debt which they cannot afford – or that bank lending is the only option. Neither of these are true, and equipment financing is often a much better alternative to bank lending for its flexibility, amounts available, and repayment schedule.
If there is any doubt, some statistics should help convince. Since 2009, asset finance has grown by nearly 22%, up to £25.4 billion, which represents 27.9% of the UK investment in machinery, equipment and purchased software. There are currently an estimated 2 million outstanding asset finance contracts in the UK, with an average of 2,500 signed every day. 60% of those figures are signed with SMEs, although even the biggest companies in the world use asset finance.
Since our inception, we have worked very closely with catering equipment suppliers and hospitality businesses across the UK. We can help get finance for almost any kind of tangible or intangible business requirement, and have helped finance anything from a single coffee machine to a quarter-million pound kitchen refurbishment. Our finance deals are usually fixed-term – anywhere between 1-5 years – and fixed cost, so businesses know exactly what to expect.
With many high street banks unwilling to invest in what they see as risky investments, we are more than happy to take on finance deals for catering equipment, with our acceptance rate standing at 92%. One example of this was our deal with a catering equipment supplier and their care home operator client, who needed purpose-built catering facilities. Rather than only getting what they could afford (a common trait amongst SMEs unfamiliar with finance), they decided to come to Johnson Reed to help provide finance for the entire kitchen.
Leasing is a vital tool for growing businesses in the SME market, especially those in the care sector where the demands on capital expenditure are so high. Many overlook the tax benefits and added value this simple to arrange credit facility can bring their business.
Dave Foran FD, New Care Projects / The Grand Care Centre; West Bridgford
If you’re an SME looking to get new equipment, please call us and we can explain in more detail how asset finance can be suitable for your business. Likewise if you’re an equipment supplier looking to supply your clients, we can offer some truly excellent advantages.
